Get on the property ladder with First-time buyer mortgages

Getting a first-time buyer mortgage can have its perks: the ability to secure a lower deposit mortgage – and sometimes lower interest rates – compared to conventional mortgage options being a big one.

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At My Mortgage Finder, we provide specialist advice on mortgages for first-time buyers. Soon-to-be homeowners like yourself choose us because we do things a little differently. We don’t work for mortgage companies – we work for you.

Whether you’ve got your eyes set on a house already or are just about to start your journey, our mortgage-finding services are here to help.

Found your perfect home? How to get started with a first-time buyer mortgage

Where do I start?

How much will it cost?

How much can I borrow?

Congratulations on taking the first step to securing your future home! This is an exciting time, but the process of getting a mortgage may be intimidating if you don’t know where to start. That’s okay, we’re here to help you.

First things first, when getting a mortgage we usually start by accessing your finances. My Mortgage Finder takes care of that for you – upon your initial call with us, we’ll do an income and expenditure assessment to determine how much you can afford on a monthly basis. We’ll do all the research for you so you don’t have to do any of the heavy lifting.

Once familiar with your personal circumstances, your dedicated mortgage consultant will go away and do their research and find the mortgages that suit you best. They will present these options to you, and once you’re happy with the solution, they will apply on your behalf for an agreement in principle (a document telling you how much you can borrow) – this will get you started on the official mortgage application process!

Getting a mortgage can seem daunting for a first-time home buyer, as mortgage costs outside of the initial upfront costs (e.g. deposit) are a long-term commitment. Here’s an idea of the costs you can anticipate ahead of purchasing your new home

Mortgage fees: These include arrangement fees, booking fees, or valuation fees.
Mortgage interest rates: This is an interest rate on your mortgage that will depend on the type of mortgage you choose and the lender. There are two types: fixed-rate mortgage and adjustable-rate mortgage, which will have a variable interest rate.
Stamp duty: First-time-buyers need to pay stamp duty land tax on properties over £425,000. SDLT rates differ depending on the value of the property.
Legal fees: You’ll need to pay legal fees for conveyancing, which involves the legal transfer of the property from the seller to the buyer.

Of course, this will all depend on your finances. Factors such as credit score – for example, where you qualify for a bad credit mortgage – income ratio, outgoings, and specific lender criteria will help determine how much you can borrow.

Usually, it is 4 to 5 times your annual salary (sometimes higher!). As an example, if you earn £25,000 a year, you might be able to borrow up to £125,000 on a mortgage.

To get an idea of how much you can borrow as a first-time buyer, you can use My Mortgage Finder’s own mortgage calculator or for a more thorough review, we always recommend speaking to one of our advisers.

Found your perfect home? How to get started with a first-time buyer mortgage

Where do I start?

How much will it cost?

Mortgage fees: These include arrangement fees, booking fees, or valuation fees.
Mortgage interest rates: This is an interest rate on your mortgage that will depend on the type of mortgage you choose and the lender. There are two types: fixed-rate mortgage and adjustable-rate mortgage, which will have a variable interest rate.
Stamp duty: First-time-buyers need to pay stamp duty land tax on properties over £425,000. SDLT rates differ depending on the value of the property.
Legal fees: You’ll need to pay legal fees for conveyancing, which involves the legal transfer of the property from the seller to the buyer.

How much can I borrow?

Usually, it is 4 to 5 times your annual salary (sometimes higher!). As an example, if you earn £25,000 a year, you might be able to borrow up to £125,000 on a mortgage.

*Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it.

Tips to successfully buying your first home

Look beyond aesthetics: While it’s important to find a home that you find visually appealing, also consider practical aspects such as location, neighbourhood, and resale value.
Consider getting a building survey: Before finalising the purchase, it’s essential to get a building survey to identify any potential issues or repairs that may need to be made. Sometimes a house can have hidden costly issues such as mould.
Hire a reliable conveyancer: A conveyancer can help you navigate the home-buying process, especially as a first-time buyer.
Read and understand all documents: Make sure you read and understand all documents related to the purchase of your home, including the purchase agreement and your mortgage documents.

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FAQs: Your questions answered by our experts

Will I be accepted for a mortgage as a first-time homebuyer?

Whether or not you will be accepted for a mortgage as a first-time homebuyer will depend on a few factors. Some of the main factors that lenders may take into consideration are:

Your income and debt-to-income ratio.
Your credit score.
Your employment status.
Your deposit amount.

Why do I need an agreement in principle?

An agreement in principle (AIP), also known as a decision in principle, is a written estimate from a mortgage lender that indicates how much they may be willing to lend you based on your financial situation.

It shows you what you can afford and how much you can borrow.
It shows estate agents and sellers that you’re serious and gives you a competitive edge.
It speeds up the mortgage application process as an AIP includes an assessment of your financial situation and a credit check.
It can help you negotiate for a better price on a property as a seller may be more willing to accept your offer if you already have secured a mortgage.

How much deposit do I need?

As a first-time buyer, the amount of deposit you need will depend on the price of the property you want to buy and the lender’s criteria. However, most mortgage lenders require a minimum deposit of 5% to 10% of the property’s value.

For example, if you’re looking to buy a property worth £200,000, you’ll typically need a deposit of at least £10,000 to £20,000.

The larger your deposit, the more attractive you are as a borrower to the lender. Having a larger deposit means that you’ll need to borrow less money and, therefore, you may be able to access better mortgage rates, which could result in lower monthly payments.

For more insight into securing your new home, visit our frequently asked questions where we demystify more mortgage jargon.

Making sense of closing costs

There are a lot of expenses that go into buying a house, many of which can catch you by surprise as a first-time homebuyer.
Closing costs are fees associated with the finalisation of the home purchase. They typically include but are not limited to:

Fees for the lender
Land registry
Home survey
Property valuation
Survey costs

The closing costs can range from 3% to 5% of the property’s value and will also depend on whether you’re buying independently or through an agent.

Talk to one of our expert advisors today for more information.

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Looking to secure a first-time buyer mortgage? Simplify your search with us

We hope that this information has made the process clearer for you. At My Mortgage Finder, we work for you and want to help you achieve your homeownership dreams without hassle. Finding the right home is tough as it is – you don’t need the added struggle of finding the right mortgage too!
We believe in complete transparency at My Mortgage Finder and will always be upfront every step of the way.

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